Draft Asian Infrastructure Investment Bank (Immunities and Privileges) Order 2015
Debate between Gareth Thomas and Graham Allen(9 years ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Graham Allen (Nottingham North) (Lab)
It is a pleasure to serve under your chairmanship, Mr Gapes, as always.
I am delighted to see colleagues with vast experience of international development in Committee—my right hon. Friend the Member for Cynon Valley, my hon. Friend the Member for Harrow West and the right hon. Member for Sutton Coldfield, who was a distinguished Secretary of State. I hope that they will take the chance to talk about the important question of immunities and privileges as far as it extends to the broader remit of what China is trying to achieve in its foreign policy goals, which we appear to be swallowing, sometimes without taking too much time to see what it is that we are swallowing.
Immunities and privileges are important in that regard. I do not want us to become the Chancellor’s version of an eastern powerhouse. We will be putting about £2 billion into the bank. Will there be a return domestically, in the countries that will benefit from the projects, and in our own UK economy? Will we get representation? Will the immunities and privileges in the draft statutory instrument be sufficient to safeguard the British interest? That is my anxiety about the helter-skelter speed at which some things are being done politically—though we all wish the Chancellor well, because we all wish Britain well when we enter such engagements—and at the parliamentary level. You know better than anyone, Mr Gapes, that such things need proper, careful, steady scrutiny. We ought sometimes perhaps to take a leaf out of the Chinese book. If things took several years to come to fruition, we would be able to understand them in much more depth. Many people, even in the House, are totally unaware of what the bank will do and how it will fit with existing institutions. If we asked the man and the woman in the street about the Asian Infrastructure Investment Bank, they would not have a clue what we were talking about, yet we are going to cast £2 billion into that bank.
One of the good things, and one reason why I am interested in hearing the former Secretary of State’s comments, is that the institution is still a moveable feast. We have seen a number of changes, even in the past six months, in the Chinese position, in respect of, for example, the representation and stakeholding, and what the functions of such an investment bank might be. I wonder whether the former Secretary of State in his private moments, or perhaps even in a pubic moment today, might ask about the impact of the bank, and of Chinese economic and foreign policy, on our overall strategy for international development and for helping people in difficulties—abroad, of course, but also in our own country. I will not stray into nuclear power or the demise of the steel industry because you would rightly call me to order, Mr Gapes.
The other people who have raised warning flags are our good allies across the water, in the United States. They have asked a number of questions and we have consequently seen movement on the Chinese side. The Chinese have not said, “No, we’re not going to listen. It’s this or nothing else.” In such a negotiation, it is wise to play it long and keep a number of other things on the table. We have to develop international institutions, particularly with our friends and partners in China and India, but we need to ensure, rather like the Prime Minister is trying to do in Brussels, that the shopping list is not a closed one but one that can benefit from interaction and negotiation.
Over several months, the United States has, in an unusual way, flagged up rather clearly—in terms of our international friendship—some of its anxieties about our being a little too eager to chase after the Chinese dragon and accommodate its demands rather than to hold out and strike a tougher dealer. It is not good enough to say, “We’re going to let China come in. We’re going to trade with China.” We need to be clear about what that means. It has implications for the immunities and privileges we are talking about. For example, are the privileges and immunities granted to staff members of the World Bank identical to those granted by the order? Are we duplicating the facilities of the World Bank and many other international institutions? Was the establishment of the institution an attempt to create a counterpart to the World Bank? Perhaps we have seen that one off for the moment, but I do not get the sense that the Government are particularly clear about what they wish to do in that regard.
Regarding the immunities granted to people who will serve the institution, we also need to be clear that they do not give carte blanche to operate exploitative relationships, particularly with people who endure difficult working conditions. There is a lobby today about the Trade Union Bill. There may well be places where there are no trade unions and where workers are exploited, and we need to ensure that the people who run the institution take that into account. Who are those people? Are they representative? Will they give infrastructure resource to other countries to help them to develop with one hand, while encouraging practices that we would all condemn with the other hand? The people at the top of the organisation need to be aware of and clear about the need to develop these institutions on a much fairer basis.
Mr Thomas
My hon. Friend makes an important point, not least because the history of Chinese infrastructure aid to many developing countries, important as it has undoubtedly been, has often involved Chinese labourers effectively being imported into the country where the infrastructure is being built as a quid pro quo for the investment. Surely we need to ensure that that cannot be achieved as part of the investment we are potentially committing to this bank.
Mr Allen
That is why this particular statutory instrument is very important. The shareholders, stakeholders and staff of this institution who are going to enjoy the immunities and privileges being granted to them by this statutory instrument need to be on full alert that this is not an attempt to just co-operate and to maximise the exploitation of the people working in various parts of Asia covered by the institution.
Mr Thomas
The people of Harrow West have always been interested in multilateral development banks, and they will certainly be interested in this new addition to the family. I want to pick up where my hon. Friend the Member for Nottingham North left off. One recognises the global Realpolitik that has clearly influenced the Prime Minister’s enthusiasm for contributing to this new bank, but one hopes that the Minister and his colleagues in the Department for International Development will, as my hon. Friend suggested, start to ask much tougher questions than those that the Minister suggested in the part of his opening remarks that I was able to hear are being asked.
Multilateral development banks have always been a cosy club. The Americans always get to pick the head of the World Bank; the Europeans always get to pick the head of the European Bank for Reconstruction and Development; and it is usually a Japanese national who gets chosen to be the head of the Asian Development Bank. There is therefore a sense that this new multilateral development bank is on the horizon partly because the Chinese want their own bank that they can control. That suspicion is fed by the appointment of Mr Jin Liqun, who seems to be the de facto chief executive of the new bank. I look to the Minister to give a fuller answer on whether he is there for a short or a long period, whether there will be interviews and whether Britain will be on the interview panel.
There is usually a series of vice-presidents to handle particular parts of a multilateral development bank’s portfolio. It would be good to hear a bit more about the structure of the proposed bank. Will there be a series of vice-presidents? Which countries does the Minister expect will provide the heads of the bank? Is this perhaps an opportunity for another Member from Nottingham to take up a position in the international development world? Is there a chance for Britain to hold one of the vice-presidencies of the new bank, given our significant contribution?
On staffing, given the scale of the spending that this multilateral development bank will presumably be able to make—very large sums of money will be committed to very large infrastructure projects—what will be the governance arrangements for those projects? Will Britain have a dedicated official and a team to support them, as we do at the World Bank and the Asian Development Bank, who will be able to go through the fine print of each proposed investment and pick through whether the environmental and social safeguards that the bank eventually signs up to are met in full?
Will there be a process by which Britain and others can raise human rights concerns, if there are any, about particular infrastructure projects? I ask that in the context of Sri Lanka, a country that certainly needs significant multilateral investment—the Chinese have been showing considerable interest in providing that—but where significant human rights concerns remain, particularly in the north and the east. It would be a tragedy if British investment in the new bank was inadvertently to reinforce through infrastructure spending the denial of human rights to particular groups in Sri Lanka.
Mr Allen
I am not sure whether my hon. Friend was seeking to nominate me for some sort of position in the bank when he mentioned a Member for Nottingham who could keep an eye on things, but modesty would forbid me from accepting such a role. There is a Member of Parliament for Nottinghamshire—the right hon. Member for Sutton Coldfield—who is eminently qualified to defend the interests of working people, as he ably did when he was the Secretary of State for International Development. He is too modest to get to his feet and acknowledge that, but he is in the Committee. Perhaps the Minister might think carefully about how we safeguard people in that position, because we have seen recently—
Mr Thomas
I am grateful for my hon. Friend pointing out to me that Sutton Coldfield is slightly further away from Nottingham than I had initially realised. Being from London, we are sometimes a bit hazy about the distances between constituencies north of Watford. Indeed, the right hon. Member for Sutton Coldfield might be an excellent potential vice-president if the Foreign Office was willing to fight for him to get such a post. Perhaps the first thing would be to know whether Britain will have a chance of nominating one of the deputies or vice-presidents to that role.
As I was alluding to, some of the commentary about the new bank has pointed out that its byelaws require a 75% super-majority for major decisions. That will effectively give China a de facto veto on personnel and policy decisions. It would be helpful to know whether that commentary, which was issued at the end of June this year, is still accurate, or whether there have been changes to the byelaws. It would be a concern if we were simply to pump money into the organisation with the Chinese having a veto over all the big decisions, particularly if we had significant concerns about spending going forward.
The previous Labour Government were pushing for reform of the processes for appointing the heads of multilateral development banks. I do not know whether the right hon. Gentleman carried on that work, but it would be good to hear from him on that subject.
The Committee and the whole House are entitled to hear what reassurance the Minister can give us on this crucial matter. Sadly, there was often little opportunity in the House to debate the work of the multilateral development banks. All too often, debate took place only when major funding decisions were being announced. Can the Minister set out whether there will be a change in that regard? Given that it is a new institution, early scrutiny on the Floor of the House might be important.
Finally, the AIIB released draft environmental and social safeguards. A series of NGOs have expressed concern about those safeguards, and it would be useful to hear from the Minister whether Britain has taken any of them up and whether there have been any reforms of and improvements to the draft guidelines.
Cities and Local Government Devolution [Lords] Bill
Debate between Gareth Thomas and Graham Allen(9 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
I agree with my hon. Friend’s argument on income tax. Might the full suite of property taxes, not just business rates, also be worth considering in this context? I draw his attention to my amendment, clearly not as well drafted as his, suggesting that property taxes should be devolved in full to London. I hope to catch Mrs Main’s eye and say a few words on that later.
Mr Allen
Our London colleagues have done some fantastic work on how to localise taxation that is currently held by the centre. That has to be done sensitively and carefully, but as I said earlier—I do not think my hon. Friend was present then—every other western democracy manages that difficulty without a problem. In Sweden, America, Canada, Italy, Germany and Holland, it is second nature to retain money locally from business rates, landfill taxes and land taxes such as stamp duty. They get by pretty well. In fact, because that system is institutionalised, their local government has immense power over and above what we have as vassals. In effect, we do what we are commanded to do according to the crumbs left in the begging bowl after the Chancellor has done his bit for the national economy.
It is absolutely open to us to do work similar to that done by my hon. Friend, Professor Tony Travers and consecutive London Mayors to liberate people. Nottingham gets a lot of tourists because of the Robin Hood tradition and the castle, so we could have a hotel tax or a bed tax of £1 a night. That happens in other western democratic countries and the people endorse it. There is a big caveat though: no council should do this unless the people have okayed it and bought into it. Councils should also be able to borrow on the open market on the basis of their credit rating, but they need to have the consent of the people. It is perfectly possible for us to do what my hon. Friend suggests.
Mr Allen
I again agree with my hon. Friend. We are not there yet and it is not a done deal yet. We need to make the points that he very ably makes about equalisation. I will say to him, however, that if it is a choice between being instructed by Whitehall how to spend not very much money and having not very much money to spend locally, I would go for spending it locally every time, because we will maximise value and spend the money sensitively. Whatever money is available, it is better spent by those who know what they are doing, rather than by the man in Whitehall. I totally accept my hon. Friend’s points.
Mr Thomas
Is not a further argument for local taxes being controlled at local level that it allows local government a full range of policy responses to deal with local problems? I offer the example—I hope to catch your eye on this later, Mrs Main—of the housing crisis in London, where an ability to impose higher taxes on empty homes might be one part of the solution to the housing crisis.
Mr Allen
The nuance that I would add to my hon. Friend’s excellent point is that local taxation need not necessarily always be collected locally. Income tax is a very good example. Provided that it is distributed fairly from the centre, it makes a lot of sense for collection to be a central function, with Her Majesty’s Revenue and Customs simply continuing to do what it does, openly and transparently. Other things—he mentioned a hotel tax, business rates and so on—are much more amenable to local decision making, but we are long way from that.
Cities and Local Government Devolution Bill [Lords]
Debate between Gareth Thomas and Graham Allen(9 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text
Mr Thomas
There is a justification for having a referendum in London to consider the extension of powers: we had one when we set up the Mayor and the Assembly. If there is to be further substantial devolution then there is certainly a case to be made for a referendum to cement mayoral and Assembly authority over those additional powers.
Another area for London ought to be full fiscal devolution. I welcome the announcement on business rates, but I am afraid that does not go far enough. All property taxes should be devolved. The all-party consensus of the mayoral London Finance Commission report published in 2013 was for a pound-for-pound reduction in revenue support grant as the quid pro quo that London offers back. It remains opaque at best on why the Treasury will not agree not just to business rates but to additional property taxes to London.
Mr Graham Allen
I am enjoying very much my hon. Friend’s review of where we are on local government finance in London. Does he not accept that we have broken the precedent with the Treasury by having income tax assignment for Scotland? The law was passed three or four years ago, before the devolution referendum. It now, very properly, has a system of income tax devolution. Is not the long-term answer to have a proper baseline budget, rather than little slices, so that London, Nottingham and every other part of the country can look after its own affairs?
Mr Thomas
My hon. Friend is, as ever, ahead of me. I share his view that in time—particularly if there are substantial additional public services responsibilities devolved to London, not least the extra powers, alluded to by my hon. Friend the Member for Blackley and Broughton (Graham Stringer), relating to healthcare—there would be a case for more control à la Scotland, certainly the ability in the current settlement to vary levels of income tax. Why should London or Nottingham not be able to impose new additional levies—for example, a tourist levy that many other big world cities, such as New York, can impose? It is striking that in London business has strongly supported the devolution to local control of all property taxes, not just business rates. They see it as essential to speed up infrastructure development. I urge the Minister and the Secretary of State to use their influence with the Chancellor to encourage him to go even further down the line of fiscal devolution.
There is also a question about the living wage. Why does that need to be controlled by the Treasury? Why should the decision not be set, after consultation with business, by local people? There could perhaps be a local minimum set by national Government, with the actual rate determined by at regional level by local decision makers. I again draw the attention of the House to London, where a living wage and a living income would be very different from that in other parts of the UK.
If there is to be a further devolution of powers to London—I hope there will be—we need to consider stronger scrutiny powers for the London Assembly. The Assembly ought to be able to scrutinise the heads of major public utilities—such as water, electricity, gas, National Rail and broadband providers—on their London work programmes and on how Londoners will be affected by their decisions, in the same way that the Assembly is able to scrutinise other crucial services, such as policing and transport. I commend the case for further devolution to London and hope to probe this issue with the Government in due course.